The Securities and Exchange Board of India (SEBI) has adopted a markedly different regulatory approach, significantly slowing the pace of fresh rule-making while prioritizing the implementation and enforcement of existing regulations. This strategic shift represents a transition from a consultation-heavy approach to a more execution-focused regulatory framework.

Regulatory Approach Transformation

Sandeep Chordia, Chief Operating Officer at Kotak Securities, highlighted the fundamental change in SEBI's regulatory strategy. "Last year was more about bringing out new consultation papers, whereas this year has been more about execution and enforcement of those circulars," Chordia explained. The regulator has maintained its consultative approach before implementing new rules, providing the industry with sufficient preparation time and even deferring certain regulations based on stakeholder feedback.

T+0 Settlement Timeline Extended

SEBI's decision to extend the T+0 settlement implementation deadline indefinitely demonstrates the regulator's commitment to thorough preparation over rushed implementation. The extension came after careful consideration of industry challenges and stakeholder concerns.

The T+0 settlement system presents substantial operational complexities, requiring real-time processing capabilities and significant system modifications across multiple stakeholders. Foreign Portfolio Investors (FPIs) face additional challenges due to geographical separations, necessitating extensive operational adjustments.

Derivatives Market Regulation Impact

SEBI's derivatives market tightening measures have demonstrated measurable success in curbing excessive speculation. The regulator implemented several key restrictions targeting weekly expiries and speculative trading patterns.

The measures included increasing lot sizes and restricting weekly expiries, specifically designed to address concerns about excessive churning on expiry days. These regulations successfully reduced the number of derivative participants while maintaining market liquidity through stable premium volumes.

Market Data and Regulatory Perspective

Chordia acknowledged that approximately 23% of retail investors experience losses in derivatives trading, emphasizing that these markets operate as zero-sum games. However, he noted that determining winners and losers falls outside the regulator's purview, with SEBI's primary concern being excessive speculation rather than individual trading outcomes.

The regulator continues exploring suitability criteria for derivatives trading, though Chordia indicated that India remains some time away from implementing a comprehensive suitability framework. This measured approach aligns with SEBI's broader strategy of thorough consultation and gradual implementation.

Industry Adaptation and Future Outlook

The current regulatory environment has provided market participants with greater certainty and implementation timelines. SEBI's willingness to defer regulations like T+0 settlement based on industry feedback demonstrates a balanced approach between regulatory objectives and practical implementation challenges. This methodology has allowed financial institutions and market infrastructure providers to adequately prepare for upcoming changes while maintaining market stability and operational efficiency.

In line with this approach, the securities regulator has slowed the introduction of new rules, prioritizing the implementation of existing regulations. The T+0 settlement timeline was extended, while the derivatives measures showed a positive impact on curbing speculation. This shift in focus from rule-making to enforcement reflects SEBI's commitment to ensuring effective implementation of existing regulations before introducing new ones.

The Securities and Exchange Board of India (SEBI) has implemented comprehensive reforms to streamline the process of obtaining duplicate securities, significantly reducing compliance burden for investors. The regulator announced on Wednesday that it has doubled the monetary threshold for simplified documentation from ₹5 lakh to ₹10 lakh, making the process faster, more efficient and investor-friendly.

The SEBI move follows a consultation paper the market watchdog issued in November to ease investor compliance and remove inconsistencies. The regulator said the ₹5 lakh threshold was too small, no longer reflected current market realities, and imposed an avoidable procedural burden on investors.

Key Changes in Documentation Requirements

SEBI has introduced a tiered approach to documentation based on the value of securities held. The new framework establishes clear categories with specific requirements for each tier.

A significant relief for smaller investors is the elimination of notarisation requirements for the Affidavit-cum-Indemnity Bond when securities are valued up to ₹10,000. This change removes an additional procedural step that previously added time and cost to the process.

Five Key Points for Investors

The overhaul ensures that investors holding securities valued up to ₹10 lakh will now be required to submit fewer documents. Here are the essential points investors must know:

Previous Requirements and Changes

SEBI had prescribed the documentary and procedural requirements for issuing duplicate share certificates through its master circular. Under the previous rules, if the securities' value was ₹5 lakh or more, the security holder was required to submit a copy of FIR or police complaint or court injunction order along with details of the securities, folio number, distinctive number range and certificate numbers.

Investors were also required to advertise the loss of securities in a widely circulated newspaper and submit an affidavit and indemnity bond separately on non-judicial stamp paper. The SEBI paper noted that the value of securities could be less than the value of stamp duty in many cases, making the payment of stamp duty on two different instruments illogical.

Implementation and Immediate Effect

The changes were made via a circular issued late Wednesday and the provisions came into force immediately. The new rules apply to all applications currently under process, with SEBI directing all listed companies and registrar and transfer agents (RTAs) to process requests strictly according to the revised procedures.

This move by SEBI is expected to reduce the compliance burden for investors significantly by making it easier for a larger number of investors to obtain duplicate securities with less paperwork and fewer procedural hurdles, while promoting dematerialisation across the securities market.